Paytm CEO Vijay Shekhar Sharma Voluntarily Foregoes Rs1,800 Crore in ESOPs amid SEBI Scrutiny
Moneylife Digital Team 17 April 2025
Paytm’s founder and chief executive officer (CEO) Vijay Shekhar Sharma has voluntarily surrendered employee stock options (ESOPs) worth over Rs1,800 crore. The move comes months after the Securities and Exchange Board of India (SEBI) issued show-cause notices (SCN) over alleged violations of share-based benefit regulations.
 
In a regulatory filing One97 Communications Ltd (Paytm) says Mr Sharma has voluntarily surrendered 21mn (million) or 2.1 crore ESOPs previously granted to him under the One 97 Employees Stock Option Scheme, 2019. The company stated, "Mr Sharma has informed us that he has decided to forgo all 21mn crore ESOPs with immediate effect."
 
The disclosure was made following a meeting of the nomination and remuneration committee (NRC) of the company’s board held on 16 April 2025. 
 
Some of the unvested stock options have been cancelled, while the rest have been returned to the company’s ESOP pool. Based on Paytm’s share closing price of Rs864.50, the surrendered options are valued at Rs1,815.45 crore.
 
This decision will result in a one-time, non-cash ESOP expense of Rs492 crore in Q4FY24-25, the company added, with corresponding cost savings in the years to come. 
 
The ESOPs in question were granted to Mr Sharma at the time of Paytm’s initial public offering (IPO) in 2021. Ahead of the listing, Mr Sharma reduced his shareholding from 14.7% to 9.1% by transferring nearly 31mn or 3.1 crore shares to Axis Trustee Services, which acted on behalf of his family trust, making him eligible for the ESOP allocation.
 
However, in August 2024, SEBI issued an SCN to Paytm over the grant, pointing to a violation of rules that restrict significant shareholders, those with the power to influence key company decisions, from receiving ESOPs.
 
In response to regulatory scrutiny, Paytm has also made changes to its ESOP policies in recent months. In March, the company revised the scheme to link vesting to annual performance ratings. It has expanded its ESOP pool and conducted multiple ESOP allotments to eligible employees over the past six months.
 
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